Editorial: The Chicago schools budget crisis is here

Pensions drain money that should go to classrooms

July 23, 2013

Students do their homework during a public hearing on the proposal to close Dumas Technology Academy and consolidate the school with Wadsworth Elementary. The hearing was held at Chicago Public Schools headquarters. (E. Jason Wambsgans, Chicago Tribune)

In the next few days, Chicago Public Schools officials are expected to lift the curtain on how the district hopes to fill a projected $1 billion budget chasm for the fiscal year that just started. For context: That shortfall equals roughly one-fifth of the district's operating budget for the 2012-13 school year.

CPS has already taken some painful steps to shrink that chasm: Almost 3,000 teachers and school-based staff have been laid off in recent weeks. Principals have slashed programs because their schools' budgets have cratered. Class sizes are expected to rise. Dozens of elementary schools have been shuttered.

We don't know how much of the $1 billion the district's decisions to date will save. But the CPS money crisis is here and — despite district officials' hopes and vows — it will hit students and classrooms.

CPS has spent the past few months quietly whittling away at its budget. Too quietly. The district stoked parents' anxiety because it refused to release school-by-school preliminary budgets. Instead, the bad budget news trickled out as principals scrambled to cut staff and programs.

Chicago Teachers Union President Karen Lewis has capitalized on this clumsiness and secrecy to advance dubious fiscal fixes and wacky conspiracy theories.

Last week, for instance, she suggested that Mayor Rahm Emanuel may be orchestrating a plan to "sabotage the school system" so it could be turned over to private operators.

Please.

Lewis and union leaders have also suggested that if only CPS would shake the city's TIF piggy bank (it has) or would consider huge new tax hikes or more borrowing, then all would be well again.

It won't be. This crisis can't be deflected, as it was in 2010 when Springfield rode to the rescue, allowing CPS to take a teachers pension fund payment "holiday." That three-year break allowed CPS to skip millions in pension contributions. Result: CPS had to pay $196 million into the teachers pension fund in the fiscal year that ended June 30. This year, CPS' contribution triples, to $612 million.

On top of the pension spike is a $93 million increase in salaries and benefits, some the result of the new teachers contract after last year's strike. The rest of the shortfall is, essentially, the triumph of costs over revenues.

We'll soon learn what combination of tax increases, fund juggling and other budgetary legerdemain supposedly will allow CPS to balance its books this year. But from what we're hearing, this budget proposal may be chock full of one-time fixes. Those should not divert attention from the need for pension reforms — perhaps including changes in retirement age and cost-of-living increases — that would reduce the growth of future obligations. We won't be surprised if a package of reforms to rescue the state's pension system becomes the pattern for fixes at CPS and other troubled local governments.

Let's remember, this crisis hasn't been long in the making. The CPS teachers pension fund was fully funded in fiscal 2000, the Civic Federation reports, but by fiscal 2011 the funding ratio had flopped to 61 percent.

We hear the anguish of teachers who've been laid off not because they didn't perform, but because lawmakers and administrators have failed to confront this crisis. We hear the anger of parents who fear their children will fall behind in larger classes, or miss out if schools don't offer a full array of courses in the longer day.

Some parents — mulling switches to suburban, parochial or other private schools — echo what Wendy Katten, co-founder of parent group Raise Your Hand, told the Tribune last week: "There's going to be an exodus of middle-class families, and progress made over the last decade to improve many of these schools will be erased in one fell swoop by these decisions."

Those words should chill CPS and CTU officials, lawmakers in Springfield, every citizen in this state. Chicago's schools help drive this region's prosperity. When they thrive, Chicago thrives, Illinois prospers. When they don't ...